🕊️ Financial PlanningThe Affordable Housing Levy and buying a home in Kenya
Since March 2024 every employee in Kenya pays an Affordable Housing Levy of 1.5% of gross pay, matched by 1.5% from the employer, under the Affordable Housing Act 2024. It is important to be clear about what it is: a tax that funds the government's national housing programme, not a personal savings pot that comes back to you. Separately, you can register on the Boma Yangu portal to apply for a unit under that programme, and the Kenya Mortgage Refinance Company (KMRC) has been set up to make longer, cheaper home loans possible. This guide explains the levy and the routes to a home.
The levy: what it is and what it isn't
The levy is 1.5% of your gross monthly pay, deducted at source, with your employer adding another 1.5%. It is remitted to the Affordable Housing Fund and used to build housing units and the supporting infrastructure. It has no ceiling and applies from the first shilling of pay.
It is not refundable, and it does not build up a balance in your name. A tax relief that briefly applied to it was repealed at the end of 2024, so it no longer reduces your PAYE either. Paying the levy does not automatically give you a house or a place in the queue — for that you register separately.
Boma Yangu and the Affordable Housing Programme
To be considered for a unit under the Affordable Housing Programme you register on the Boma Yangu portal, choose a project, and make a monthly deposit towards the home you are interested in. Units are grouped by income into social housing, affordable housing and market segments, and are allocated through a ballot among eligible applicants.
Most units are sold on a tenant-purchase basis: you move in and pay monthly instalments over a long period until ownership transfers, rather than needing a large deposit and a bank mortgage up front. Read the specific project's terms — the deposit, the instalment, the tenure and what happens if you fall behind — before committing.
Mortgages, KMRC and your wider plan
Kenya's mortgage market is small and rates have historically been high, which is why the Kenya Mortgage Refinance Company was created: it lends long-term money to banks, microfinance banks and SACCOs so they can offer home loans at a lower fixed rate and over a longer term than they otherwise could. Ask primary lenders whether they have a KMRC-backed product and compare the rate and term against their standard mortgage.
Whichever route you take, housing is one goal among several. The levy is compulsory and gone; a deposit for a home should sit in a savings account; retirement still needs the NSSF plus a workplace or personal pension; and the emergency fund comes first. Treat a home purchase as a long-term plan you build a deposit toward, not something the levy does for you.
Frequently Asked Questions
- Do I have to pay the Affordable Housing Levy?
- Yes. If you earn a salary in Kenya it is a compulsory 1.5% deduction from gross pay, matched by 1.5% from your employer, under the Affordable Housing Act 2024. Self-employed people pay it on declared income.
- Does the Affordable Housing Levy come back to me?
- No. It is a tax, not a savings scheme — there is no balance in your name, no refund, and since the end of 2024 no tax relief for it. It funds the national Affordable Housing Programme, which you apply to separately through the Boma Yangu portal.
- How do I actually get an affordable home?
- Register on the Boma Yangu portal, pick a project, and pay a monthly deposit towards it. Units are allocated by ballot among eligible applicants and are usually sold on tenant-purchase terms — monthly instalments over many years. Paying the levy alone does not put you in the queue.
Informational content, not financial, tax or legal advice. Check amounts, limits and current rules directly with the official sources (the NSSF, the Central Bank of Kenya, the Kenya Revenue Authority, the Kenya Deposit Insurance Corporation) before making a decision.
